Avalon Rare Metals has been granted by the Canadian federal government the green light to push through with its Nechalacho rare earth elements project.

It was Bernard Valcourt, federal minister of Aboriginal Affairs and Northern Development, who stamped the approval on the Nechalacho project, located 100 kilometres east of Yellowknife, based on a July recommendation from the Mackenzie Valley Environmental Review Board.

Nechalacho, as Canada's first ever rare earth mine, was described as "the most advanced large heavy rare earth development project in the world," according to Avalon. Construction is expected to start on 2017, pending release of approvals to required permits.

"Our Government is committed to ensuring that Northerners have access to the same economic opportunities as all Canadians," Mr Valcourt said. "The Avalon Rare Metals Inc. Nechalacho Project represents a tremendous economic opportunity for the Northwest Territories and will lead to jobs and benefits for Northerners."

A proposed underground rare earth element mine and processing facility, the Avalon Rare Metals Inc. Nechalacho Project has an expected 20-year operating lifespan. It is also host to the second largest tantalum deposit and third largest niobium deposit in the world.

The proposed development specifically calls for an underground mine, a flotation plant, an 8 km road, a tailings management facility at Thor Lake, barge docking facilities on Great Slave Lake, and a hydrometallurgical processing plant at the former Pine Point mine area, the digitaljournal said.

As of April 2013, around 108,565 metres of diamond drilling in 502 holes has been completed in exploring and developing the property, according to Avalon.

Concentrate was proposed to be shipped by barge across Great Slave Lake to the hydrometallurgical facility.

Rare earths is a group of chemically similar metallic elements comprising the lanthanide series and (usually) scandium and yttrium. They are not actually rare, only that they occur together, making it difficult to separate from one another.

The Nechalacho rare earth elements project will cost $1.6 billion to build. It is now the most advanced potential large new source of heavy rare earths outside of China, which supplies over 95 per cent of the world's demand for the precious elements.